Rockspring's EUR 700m UK Value fund carries out acquisitions

London-based independent property fund manager Rockspring Property Investment Managers has announced the final closing of its EUR 700 mln UK Value fund. The closed-ended English Limited Partnership focuses on commercial property in the UK which offers scope for near-term capital appreciation and income growth.

At final closing, Rockspring had secured commitments totalling £336 mln from 12 international institutional investors from four countries. Allowing for gearing, the fund's spending power totals approximately EUR 700 mln.

The fund will primarily invest in small to medium sized assets primarily in the office, retail and industrial sector, targeting properties which have the ability to offer either an existing relatively high cash yield or the potential for yield growth enhanced by a modest level of gearing. There is no pre-determined geographical or sector allocation. It is targeting a net annual distribution yield of 7% and a net total return of 13% per annum. The fund's duration is seven years, with a two year investment period.

To date, the fund has acquired assets totalling £82 mln and is working on a 'strong pipeline of further investment opportunities'.

Rockspring said the assets acquired are the Precinct, Blaydon on Tyne, Tyne and Wear (Retail - £10.1 mln); The Mall, Aberdeen (Retail - £47.4 mln); 65 Southwark Street, London SE1 (Office - £8.6 mln) and Exchange House, Midsummer Boulevard, Milton Keynes (Office - £15.8 mln).

Separately, Capital & Regional, the co-investing property asset manager, announcesd that The Mall Fund has conditionally exchanged contracts with clients of Rockspring Property Investment Managers, for the sale of four shopping centres at a price of £136 mln, reflecting a net initial yield of 7.5%.

The sale is conditional upon a number of matters including the approval of the holders of loan notes in The Mall Fund to a restructuring of the terms of the loan notes. The changes to the terms of the loan notes are required because whilst the sales price for these assets is in excess of the most recent valuation, it is below the minimum release price provided for in the loan agreement.

The centres involved are The Eastgate Shopping Centre, Gloucester; the Marlands Shopping Centre, Southampton; the Liberty 2 Shopping Centre, Romford and the Howgate Shopping Centre, Falkirk.

Capital & Regional has an interest of 16.7% in The Mall Fund.